Policy Initiatives Catalog - California ISO

1 CAISO/M&ID/MIP Policy Initiatives Catalog Prepared by Market and Infrastructure Policy December 7, 2017 California ISO Policy Initiatives Catalog CAISO/M&ID/MIP 1 Table of Contents 1 Introduction .. 4 2 Initiative Categorization .. 5 3 Changes Since Previous Version .. 6 4 Initiatives Completed Since Previous Catalog .. 7 Expedited Generator Interconnection Driven Network Upgrade Cost Recovery (C) .. 7 Bid Cost Recovery Enhancements (F, E2) .. 7 Stepped Constraint Parameters (F, E3) .. 8 Black Start and System Restoration (C) .. 8 Energy Storage and Distributed Energy Resources - Phase 2 (D, E2) .. 8 Aliso Canyon Phase 3 (C, E2) .. 8 Generator Contingency Modeling/Remedial Action Scheme Modeling (C, E2) .. 9 Temporary Shutdown of resource Operations (C).. 9 Capacity Procurement Mechanism Risk-of-Retirement Process Enhancements (I, D) . 9 Consolidated EIM Initiatives (I, D, E1) ..10 Contingency Modeling Enhancements (I, C).

2 10 5 Initiatives Currently Underway and Planned ..10 Commitment Costs and DEB Enhancements (I, F, E2) ..10 Flexible resource Adequacy Criteria and Must Offer Obligation Phase 2 (I, C) ..11 Review Transmission Access Charge Structure (C) ..11 EIM Greenhouse Gas Enhancements (I, D, E1) ..11 Energy Storage and Distributed Energy Resources Phase 3 (I, D, E2) ..11 Frequency Response Phase 2 (I, F) ..12 Congestion Revenue Rights Auction Efficiency (D) ..12 Imbalance Conformance Enhancements (I, D, E2) ..13 Intertie Deviation Settlement (D) ..13 Review RMR and CPM Revisions (C) ..13 Interconnection Process Enhancements 2018 (C) ..13 6 Discretionary Initiatives ..13 Energy and Ancillary Services Markets ..14 EIM Default Energy Bid Option (D, E1) ..15 Hourly EIM resource Sufficiency Evaluation (D, E1) ..15 California ISO Policy Initiatives Catalog CAISO/M&ID/MIP 2 Over/Under Scheduling Load Enhancements (D, E1) ..15 Limiting EIM Energy Transfer System resource Transfers (D, E1).

3 16 Generator Modeling Enhancements (D, E2) ..16 Combined IFM and RUC (D) ..16 15-Minute Day-Ahead Scheduling Granularity (D, E2) ..16 Multi-Day Unit Commitment (D) ..17 Day-Ahead Flexible Reserve Product (D) ..17 Full Network Model Expansion Phase 2 (N, E2) ..17 Regional Integration (D) ..18 Extend Day-Ahead Markets to EIM Entities (D, E2) ..18 Storage as a Transmission Facility (D) ..20 Ancillary Services Verification, Compliance Testing, and Auditing (D) ..20 Bid Floor (N, E2) ..20 Fast Frequency Response (D) ..21 Real-time Market Enhancements (D, E2) ..21 Regulation Pay-for-Performance Enhancements (D) ..21 Regulation Service RT Energy Make Whole Settlement (D) ..22 Fractional Megawatt Regulation Awards (D) ..22 Multi-Stage Generator Regulation Refinements (D) ..22 Flexible Ramping Product Enhancements (D, E2) ..22 Allowing Convergence Bidding at CRR Sub-Load Aggregation Points (D) ..22 Implement Point-to-Point Convergence Bids (D).

4 23 Review of Convergence Bidding Uplift Allocation (D) ..23 Enhancing Participation of External Resources (D, E1) ..23 Potential EIM-wide Transmission Rate (D, E1) ..23 Flow Entitlements for Base / Day-ahead Schedules (D, E1) ..24 Equitable Sharing of Wheeling Benefits (D, E1) ..24 Third Party Transmission Contribution (D, E1) ..24 Bidding Rules on External EIM Interties (D, E1) ..25 Hourly Bid Cost Recovery Reform (D, E2) ..25 Inter-Scheduling Coordinator Trade Adjustment Symmetry (D) ..25 Exceptional Dispatch Decremental Settlement (D) ..25 Extending the submission deadline for Real-time Inter-SC trades (D) ..26 California ISO Policy Initiatives Catalog CAISO/M&ID/MIP 3 FMM Block Scheduling of Demand Response Resources (D, E2) ..26 Marginal Loss Surplus Allocation Approaches (D) ..26 Export Charges (D) ..26 Multi-Stage Generator Bid Cost Recovery (D, E2) ..26 Extended Pricing Mechanisms (D, E2) ..27 Integrated Optimal Outage Coordination Phase 2 (D).

5 27 Rescheduled Outages (D)..27 Regulation Aggregated Pumps and Pumped Storage (D) ..27 Congestion Revenue Rights ..28 Long Term Congestion Revenue Rights (D) ..28 Congestion Revenue Rights Revenue Sufficiency (D) ..29 resource Adequacy ..30 resource Adequacy Enhancements (D) ..30 Multi-Year resource Adequacy (D) ..30 Multi-Year Risk-of-Retirement (D) ..30 Examination of NQC Values for ELCC Methodology (D) ..30 Review of Maximum Import Capability (D) ..31 Interconnection ..31 Deletions ..31 GIDAP and Industry Generation Procurement Solicitations Alignment Opportunities (D) ..31 Interconnection Process Enhancements (D) ..31 Market Commitment Process Constraints (D) ..31 Transitional Grid Management Charge for New PTOs (D) ..32 FMM Settlements of Non-Participating Resources (D, E2) ..32 California ISO Policy Initiatives Catalog CAISO/M&ID 4 I In progress; F FERC-mandated; C ISO Committed; D Discretionary; E1 EIM GB Primary; E2 EIM GB Advisory; E3 EIM GB Hybrid Primary; E4 EIM GB Hybrid Advisory 1 Introduction This Policy Initiatives Catalog documents current, potential, planned and ongoing Policy Initiatives to develop enhancements to the California ISO (CAISO) markets or to related requirements or Policy .

6 These are enhancements requiring a stakeholder process and typically resulting in CAISO tariff changes. This Catalog does not list potential process improvements or administrative This Catalog is organized into the following sections: Stakeholder Policy Initiatives Catalog Changes Since Previous Version Initiatives Completed Since Previous Catalog Initiatives Currently Underway and Planned Discretionary Initiatives o Energy and Ancillary Services Markets o Congestion Revenue Rights (CRRs) o resource Adequacy o Interconnection Proposed Deletions The CAISO updates this Catalog twice a year in February and August. 2 Stakeholders may submit new initiative requests through the Policy Initiatives submission template posted on the Annual Policy Initiatives Submissions will be collected and considered for its respective Catalog update until the first Tuesday of January and Following the deadline of submissions, the process for updating the Catalog is as follows: 1.

7 Stakeholder submissions are posted 2. ISO publishes draft Policy Initiatives Catalog 3. Stakeholders submit comments on draft Policy Initiatives Catalog 4. ISO publishes final Policy Initiatives Catalog 5. Stakeholders submit comments on final Policy Initiatives Catalog 1 Such requests should be made through an ISO customer service representative or account manager. 2 This new process will follow the above listed dates beginning in August 2018. 3 4 See footnote 2. California ISO Policy Initiatives Catalog CAISO/M&ID 5 I In progress; F FERC-mandated; C ISO Committed; D Discretionary; E1 EIM GB Primary; E2 EIM GB Advisory; E3 EIM GB Hybrid Primary; E4 EIM GB Hybrid Advisory Stakeholder s new initiative requests received for this version of the Catalog are summarized in Section 3, below. The Policy Initiatives Catalog is a separate document used in the development process for the Annual Policy Initiatives Roadmap.

8 2 Initiative Categorization This Catalog sorts Initiatives into various categories using letter codes. These codes are found next to the initiative s title. An initiative s categorization determines priority for its inclusion in the roadmap. The codes below are listed in priority of the CAISO: I In-progress Initiatives ; F FERC-mandated Initiatives ; C ISO Committed Initiatives ; and D Discretionary Initiatives FERC mandated Initiatives are Initiatives the CAISO must complete to comply with FERC orders. CAISO committed Initiatives , which the CAISO tries to use sparingly, are Initiatives that address very significant reliability or market efficiency issues. They also are Initiatives the CAISO previously committed to during a regulatory proceeding or has already stated that it would undertake them to stakeholders, the CAISO Board of Governors, EIM Governing Body, or FERC. Discretionary Initiatives are the remainder of Initiatives suggested by either the CAISO or stakeholders for consideration in the roadmap.

9 Discretionary Initiatives are prioritized by the CAISO with stakeholder input during the development of the Annual Policy Initiatives Roadmap. The in progress code may be combined with any of the other three codes. This indicates that a Policy initiative has begun and a webpage likely exists on the CAISO In addition to the above codes, this document also includes codes for Policy Initiatives that may affect the Energy Imbalance Market (EIM). These codes describe the role of the EIM Governing Body in approving the Policy resulting from the The EIM Governing Body codes include the following: E1 EIM Governing Body s primary authority E2 EIM Governing Body s advisory role E3 EIM Governing Body s hybrid- primary authority 5 6 California ISO Policy Initiatives Catalog CAISO/M&ID 6 I In progress; F FERC-mandated; C ISO Committed; D Discretionary; E1 EIM GB Primary; E2 EIM GB Advisory; E3 EIM GB Hybrid Primary.

10 E4 EIM GB Hybrid Advisory E4 EIM Governing Body s hybrid- advisory role An E1 classification is any Policy Initiatives that involve market rules changes that fall entirely within the EIM governing body s primary An E2 classification is any Policy initiative proposing changes to generally applicable real-time market rules or rules that apply to all CAISO An E3 classification is when the primary driver for the initiative is EIM and the Policy initiative is a hybrid in that it has both a component that would fall within the EIM Governing Body s primary authority and a component that does An E4 classification is when the primary driver for the initiative is not EIM and the Policy initiative is a hybrid in that it has both a component that falls within the EIM Governing Body s primary authority and a component that does Stakeholders should consider the EIM classification codes listed in this document as preliminary.